Westpac nudges businesses towards Merchant Choice Routing

By Niko Iliakis · · 2 min read
Fact Checked
Advertiser disclosure
Customer making a contactless payment.

Westpac announced today that thousands of Australian businesses have not yet taken advantage of Merchant Choice Routing (MCR), and it will be taking a proactive role in helping merchants activate the service.

Over the coming months, Westpac will reach out to merchant customers who stand to benefit from MCR, and unless they opt against it, will switch them over.

Westpac chief executive business division, Guil Lima estimates that around 37,000 small businesses will be better off using the service.

“Westpac’s decision today will help merchant customers with Westpac owned terminals activate pricing that’s best for them, giving them one less thing to worry about at an already very challenging time,” he said.

What is Merchant Choice Routing?

In Australia, contactless payments are processed by one of three networks - eftpos, Mastercard, or Visa. Most debit cards are dual network cards, meaning they can be processed via the domestic eftpos network and the international Visa and Mastercard network.

When a customer inserts their debit card in a point-of-sale terminal, they can choose to route the transaction to the eftpos network (by selecting CHQ or SAV) or the international network (by selecting CR).

But when it comes to contactless payments, that choice disappears. Instead, transactions will often default to international networks, which typically charge higher merchant service fees (up to double those of eftpos).

Merchant Choice Routing - also known as least cost routing - gives merchants the ability to choose which network processes their business’ debit transactions. By selecting the cheapest one, merchants can see significant savings. 

How will businesses benefit?

Since April 2019, merchants operating on Westpac owned terminals have been able to opt in to the MCR service. However, confusion surrounding what it is and how it can benefit businesses has kept uptake low.

According to Lima, potential savings will depend on a few factors, including card mix, industry, transaction volume and size, and pricing plan. But even a small amount can go a long way in the current business climate.

"Every business will be different, for some customers it might mean savings of less than $100 per annum while others may save upwards of $1000,” he said.

“The impact of the pandemic on small business earnings and the potential for MCR to provide cost savings for merchants, is a key reason we are making this change now.”

“At the same time, there are a range of merchant transaction costs for businesses we are also working to simplify. Our goal is to make it easier for customers to understand their cost of acceptance and increase transparency.”

For information about the help currently available, read our small business financial support guide. And if you’re after extra finance, head over to our business loans comparison page, or browse the selection below.

Business loan comparisons on Mozo - rates updated daily

Search promoted business loans below or do a full Mozo database search. Advertiser disclosure.

Refine the list of business loans

Let’s help find you a great business loan...
  • About Great Southern Bank
    Business+ Unsecured Loan

    A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding speed
    Rates range from 11.95% p.a. to 22.95% p.a.
    $495
    Varies
    Go to site
    Details
  • About Bizcap
    Unsecured Business Loan

    Business Loans from $5,000 to $2,000,000 with high approval rates. Access to funds in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Go to site
    Details
  • About Lumi
    Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
    Funding speed
    from 9%
    -
    Within same day
    Go to site
    Details
  • About Great Southern Bank
    Business+ Unsecured Overdraft

    Manage the cash flow in your business with ease. Access up to $50,000 without using your assets as security. Lending criteria apply. Access your available limit from your linked Business+ Account. Use your Debit Mastercard for added convenience. Interest is charged on your balance owing, not your limit. Easy online application. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding speed
    Rates range from 14.95% p.a. to 25.95% p.a.
    $495
    Varies
    Go to site
    Details
  • About ScotPac
    Boost Business Loan - powered by Business Fuel

    Get secured or unsecured business funding for up to $250K. For loan terms of 6 months to 2 years. No application or account keeping fees to pay. Minimum loan amount is $10,000. Get approval in 24 hours. Loans over $100,000 require security. Minimum annual turnover of $120K.

    Interest Rate
    Upfront Fee
    Funding speed
    from 14.00% p.a.
    Details on application
    From 24 hours
    Go to site
    Details

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.